Bessent Urges BOJ to Hike Interest Rates to Stabilize Yen

U.S. Treasury Secretary Scott Bessent met with Bank of Japan Governor Kazuo Ueda on the sidelines of the G20 finance ministers' and central bank governors' meeting in Asheville, North Carolina. The two officials discussed monetary policy, with Bessent emphasizing the importance of sound formulation and communication to anchor inflation expectations and avoid excess exchange rate volatility.

According to a statement from the Treasury Department, Bessent expressed strong support for Japan's efforts to address the undervaluation of the yen and its role in contributing to domestic inflationary pressures. The Secretary noted that yen weakness has contributed to these issues, suggesting a need for a hike in interest rates.

The meeting took place on Sunday, September 1, ahead of the BOJ's policy meeting on September 17-18. Bessent's remarks are seen as reinforcing the case for Ueda to argue for a rate hike at this meeting.